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Monday, March 31, 2008

Can I Buy The Philippines?

At the beginning of the year, I promised that this blog will return to its roots. That is, to post some law topics that I do hope to be interesting enough to be read by my non-lawyer friends. I must admit, I have learned so much from looking at the photos of some of my idols here in blogosphere like Ferdz, Oggie, Langyaw, Sidney and many more. So in return, I just hope that I can share not only my current enthusiasm in photography but also share my world of numbers and laws.

This will only be my second post about law this year and I have chosen to feature land and property ownership in the Philippines dedicated to all those foreigners whom in one way or another have landed in this humble blogsite.

As a general rule, only a Filipino citizen or a corporation organized under Philippine law, where at least 60% of the capital stock is owned by citizens of the Philippines, may own land in the Philippines. A foreigner may own land by hereditary succession, or if he is a former natural-born Filipino.

The Supreme Court held that hereditary succession only applies to intestate succession or succession by operation of law, and not to testamentary succession. Otherwise, the general prohibition against land ownership by a foreigner may be negated. When the foreigner is a natural-born Filipino, he may acquire private land subject to limitations provided by law. For instance, he may own a maximum area of five thousand square meter of urban land or three hectares of rural land.

In case of real properties, there is generally no prohibition against foreign ownership of real property other than land. Thus, foreigners may own houses but not the land upon which they are built. They can however lease this land.

Foreigners may own condominium units, provided the land on which the condominium stands is owned by a corporation where at least 60% of the capital stock is owned by citizens of the Philippines even after a foreigner acquires ownership of a condominium unit.

Although a foreigner is not allowed to own land, he can however lease private land in the Philippines. The maximum period of the lease of private land to foreigners is twenty-five years, renewable for another twenty-five years upon mutual agreement of the parties. Subject to certain conditions, however, a foreign investor may lease private land for a maximum period of fifty years, renewable once for a period of not more than twenty-five years upon mutual agreement of the parties. For the foreign investors to take advantage of the longer lease term, the law requires, among other, things that the purpose of the lease is the establishment of industrial estate, factories, assembly or processing plants, agro-industrial enterprises, land development for tourism, industrial or commercial use, or similar priority productive endeavors.

Although the law does not provide for this, there is also another way of buying the Philippines – that is for the foreigners to enter into a multi-billion IT and telecommunications contract with the president, her husband and her cabinet members in exchange for renouncing a claim against a group of islands which historically belongs to the Philippines. Now… this will be another interesting topic and requires a solo post of its own.

Personal Note:

Congratulations to all my friends who passed the 2007 Bar Examinations:

Anyway, many foreigners have indeed gone around the law by marrying Filipinas and registering the land under their wives' names. Or they sometimes use Filipino fronts. For Boracay for example, they buy the land in the name of a Filipino but they keep the right to develop it. Pag ayaw na nila, ibinebenta na lang ang rights. So the pasahan continues.

@ bw - dual citizenship is involuntary. it arises, when as a result of concurrent application of the different laws of two or more states, a person is simultaneously considered a citizen of said states.

if you are born in USA from Filipino parents, then you have acquired dual citizenship.

@ ferdz - hmmm. that's a nice topic but it is quite broad. commercial law and taxation are two of my fave subjects and i happen to practice both of them. i'll try to make a primer-type post on how to start your business (regulations and taxes to follow) hopefully soon.

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all photos and articles are properties of atty. oman a.k.a lawstude. i know my rights and know how to use them. if you are interested in these photos, please e-mail me at oman[underscore]serapio[at]yahoo[dot]com.